March 14 (Bloomberg) -- Hong Kong stocks climbed, with the
benchmark index rising the first time this week, as banks
reversed earlier losses and utilities advanced. Developers slid
as HSBC Holdings Plc raised mortgage rates in the city,
augmenting concern that China is boosting property curbs.

Industrial & Commercial Bank of China Ltd., the world’s
largest lender by market value, climbed 1.1 percent after
falling as much as 1.3 percent. China Resources Gas Group Ltd.,
a distributor of piped natural and petroleum gas, advanced to a
record high after its full-year profit rose. Sun Hung Kai
Properties Ltd., Hong Kong’s biggest builder, slid 3.3 percent.

The Hang Seng Index climbed 0.3 percent to 22,619.18 at the
close, the biggest gain since March 8. Volume was 9.1 percent
above the 30-day average, according to data compiled by
Bloomberg. The Hang Seng China Enterprises Index of mainland
companies increased 0.6 percent to 11,101.96, reversing an
earlier slide that saw the gauge briefly extend losses to more
than 10 percent from a Feb. 1 high.

“In the short term, the market is still under pressure but
right now it’s going into a longer term support level zone,”
said Linus Yip, a Hong Kong-based strategist at First Shanghai
Securities Ltd. “We expect there may be some bottom fishing and
bargain hunting coming out.”

About five stocks declined for every four that gained on
the Hang Seng Index. The gauge erased this year’s gains
yesterday as Chinese developers tumbled amid concern the
government is intensifying efforts to curb property prices, and
as data in the past week has signaled slower growth in the
world’s second-largest economy.

Relative Value

The benchmark equity measure traded at 10.9 times estimated
earnings yesterday, compared with 14.1 for the Standard & Poor’s
500 Index and 12.7 for the Stoxx Europe 600 Index, according to
data compiled by Bloomberg.

A measure of utility companies had the biggest gain among
the 11 industry groups in the Hang Seng Composite Index. China
Resources Gas jumped 5.3 percent to HK$19.48 after saying its
full-year profit rose 38 percent from a year earlier.

China Longyuan Power Group Corp., a coal and wind power
producer that yesterday capped its longest losing streak since
August 2011, rose 5.4 percent to HK$6.79. Kunlun Energy Co., a
Chinese gas supplier controlled by PetroChina Co., advanced 2.3
percent to HK$16.28, the biggest gain in the Hang Seng Index.

U.S. Retail

Futures on the S&P 500 advanced 0.2 percent. The Dow Jones
Industrial Average extended its longest rally since 1996
yesterday after U.S. Commerce Department data showed sales at
retailers rose 1.1 percent in February, the most in five months
and more than twice the median estimate of economists.

Yue Yuen Industrial (Holdings) Ltd., a supplier to Nike
Inc., climbed 1.2 percent to HK$25.40, while Techtronic
Industries Co., a power-tool maker that counts the U.S. as its
biggest market, advanced 3 percent to HK$17.60.

More than half of the 10 biggest drops in the Hang Seng
Index were developers. Sun Hung Kai slumped 3.3 percent to
HK$107.90. New World Development Co., the Hong Kong builder
controlled by billionaire Cheng Yu-tung, sank 0.9 percent to
HK$13.90 while Henderson Land Development Co., controlled by
billionaire Lee Shau-kee, retreated 3.3 percent to HK$49.55.

HSBC, Europe’s largest lender by market value, and Standard
Chartered raised Hong Kong mortgage rates by 25 basis points
after the banking regulator tightened risk rules on concern a
property bubble may undermine financial stability. HSBC rose 0.9
percent to HK$84.75 while StanChart, the U.K. bank which earns
more than half its profit from Asia, slipped 0.3 percent to
HK$201.8.

‘Cautious View’

“We reiterate our cautious view on Hong Kong property
following the faster-than-expected mortgage rate hike by HSBC,”
Venant Chiang and Christie Ju, analysts at Jefferies Group LLC,
said in a report dated yesterday. “While the 25 basis points
hike may appear marginal, we see significant impact to the
physical market, and increasing risk. On the back of rising
supply and shrinking demand, we expect more price cuts as a
result of policies.”

Hong Kong last month doubled the sales tax on property
costing more than HK$2 million ($258,000) and targeted
commercial real estate for the first time as bubble risks
spread.

Beijing will strengthen a review of homebuyers
qualifications to purchase property in the city as a local
policy for real estate curbs, the China Securities Journal
reported, citing an unidentified person. The city may also
release some policies on existing home transactions, the report
said, citing the person.

Chinese developers led the retreat in Hong Kong yesterday
after Sina.com reported Shenzhen banned developers from raising
new home prices. The market extended its declines yesterday
after China’s central bank Governor Zhou Xiaochuan said policy
is “no longer relaxed” amid the threat of inflation.

“The restructuring of China’s Ministry of Railways should
generate greater efficiencies for the railway industry,”
Barclays Plc analysts led by Victoria Li said in a report dated
today. The efficiency would result in about 1.11 trillion yuan
($179 billion) of incremental spending.

ASM Pacific Technology Ltd., a maker of assembly and
packaging equipment for the semiconductor industry, retreated 11
percent to HK$85.85 after its parent ASM International NV, a
Dutch semiconductor service company, sold an 11.9 percent stake
for HK$4.27 billion.